When a temporary beneficial supply shock hits a small open economy, it causes the current account to ________ and investment to ________.
A. fall; remain unchanged
B. rise; remain unchanged
C. rise; fall
D. fall; fall
Answer: B
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Suppose that the equilibrium nominal interest rate is 5 percent and the equilibrium quantity of money is $1 trillion. At any interest rate below 5 percent,
A) the supply of money will decrease. B) there will be a surplus of money and bond prices will increase. C) the interest rate will fall and bond prices will fall. D) there will be a surplus of money and bond prices will fall. E) the interest rate will rise and bond prices will fall.
A tax imposed by a government on imports of a good into a country is called a
A) tariff. B) value added tax. C) sales tax. D) quota.
Consumers in a monopolistically competitive market do not receive any consumer surplus because the price paid for the product exceeds the marginal cost of production
Indicate whether the statement is true or false
Which of the following does not impact aggregate demand in the Keynesian model?
a. Changes in the supply of labor b. Net exports c. Household consumption d. Desired business investment demand e. Government purchases of goods and services